US Strikes on Iran’s Nuclear Sites Trigger Market Jitters: Sensex, Nifty Brace for Volatility Monday Morning

US Strikes on Iran’s Nuclear Sites Trigger Market Jitters: Sensex, Nifty Brace for Volatility Monday Morning

Indian Markets on Edge as Middle East Conflict Escalates

The Indian stock market is expected to open under pressure on Monday as rising geopolitical tensions in the Middle East have pushed crude oil prices higher and raised fresh concerns about inflation, fiscal strain, and foreign fund outflows.

Military strikes in a key energy-producing region have sparked fears of a wider regional conflict. Global oil prices spiked in weekend trading, prompting economists and analysts to warn that India—one of the world’s largest crude importers—could face immediate macroeconomic headwinds if the situation deteriorates further.

Crude Oil Rally to Impact Inflation and Fiscal Outlook

Brent crude prices are already hovering near multi-month highs, and if the conflict disrupts supply through major shipping lanes, India could see an immediate impact on its trade balance and inflation trajectory.

With the Reserve Bank of India maintaining a cautious monetary stance amid signs of core inflation easing, a renewed surge in oil prices may complicate its policy outlook. Higher oil prices tend to increase fuel costs, transport expenses, and imported inflation, feeding into consumer prices.

Sensex, Nifty May Face Downward Pressure

Equity benchmarks such as the Sensex and Nifty could witness a shaky start to the trading week. Sectors such as oil & gas, FMCG, and logistics are expected to remain in focus, while rate-sensitive segments like banking and auto may react to rising bond yields and inflationary concerns.

Analysts point out that while Indian equities have shown resilience in recent weeks, any sign of escalation in global conflict zones has historically triggered sharp corrections, especially due to the impact on foreign portfolio flows.

Rupee Vulnerable to Global Risk Aversion

The Indian rupee may also come under pressure as foreign investors seek safe-haven assets. A stronger dollar, coupled with elevated crude prices, could trigger outflows from Indian equities and debt markets, adding stress to the currency.

Currency strategists suggest that the RBI might have to intervene to manage volatility if the rupee breaches key resistance levels in early trade.

Key Economic Indicators to Watch This Week

With the Indian economy showing signs of gradual recovery and investor confidence building post-election, the sudden escalation in global tensions poses a new risk. Markets will closely watch:

• Crude oil trends – especially any disruption to supplies via the Strait of Hormuz.
• Movement in USD/INR – a sharp fall in the rupee could add to imported inflation.
• Foreign Institutional Investor (FII) activity – outflows may accelerate if risk-off sentiment prevails.
• Domestic macro data – including fuel price revisions and fiscal commentary.

Investor Strategy Amid Geopolitical Volatility

Financial advisors suggest a cautious approach in the short term. Defensive sectors like IT, pharma, and consumer staples may offer relative safety, while cyclical sectors such as real estate, auto, and travel may be exposed to downside risks.

Increased volatility could also present trading opportunities, but investors are advised to watch global developments and avoid overleveraged positions.